Holzkirchen, January 10, 2011 - Sandoz announced today that it
has begun a phase II clinical trial in patients for biosimilar
rituximab (Roche's Rituxan® / Mabthera®), a leading
monoclonal antibody indicated in conditions including non-Hodgkin's
lymphoma and rheumatoid arthritis.

The phase II study in patients suffering from rheumatoid
arthritis aims to demonstrate bioequivalence to the reference
product, and will collect data on pharmacokinetics and
pharmacodynamics as well as efficacy and safety data.

Over the past few years Sandoz has developed a robust,
high-yield and large-scale process for the production of biosimilar
rituximab in its own facilities in Schaftenau, Austria. To ensure
biosimilarity with the reference product, a comprehensive
physico-chemical and functional analysis of the product was
conducted using modern bioanalytic techniques, followed by further
studies. The data suggest that Sandoz's biosimilar rituximab is
highly similar to the reference product, justifying initiation of
clinical studies in patients.

"This key development milestone demonstrates that Sandoz, the
pioneer in biosimilars, is on track to maintain its global
leadership position in the medium to long term," said Sandoz global
head Jeff George.

Ameet Mallik, global head of Sandoz Biopharmaceuticals, added:
"Our pipeline is particularly focused on monoclonal antibodies, the
largest and fastest-growing segment of the biologics market. We are
confident that we can leverage our unrivalled development and
manufacturing capabilities as well as our Novartis-wide synergies
in areas including clinical trial design and execution, to succeed
in this exciting new field."

Monoclonal antibodies are protein-based therapeutics that are
produced using genetically engineered cell lines. They function as
targeted treatments that offer genuine therapeutic hope for many
areas of unmet need, particularly complex therapeutic areas such as
oncology and autoimmune diseases.

Mabthera® / Rituxan®, an antibody directed against the
CD20 protein found on the surface of B-cells, is one of the leading
monoclonal antibodies on the market. It ranks among the top three
biologic (biopharmaceutical) drugs worldwide, with 2009 sales of
USD 5.6 billion (IMS).

Disclaimer The foregoing release contains forward-looking
statements that can be identified by terminology such as
"commitment," "will," "on track," "plans," "pipeline," "confident,"
or similar expressions, or by express or implied discussions
regarding potential future marketing approvals of a biosimilar
version of rituximab or of other biosimilar products, or regarding
potential future revenues from rituximab or from any of Sandoz's
other biosimilar products. You should not place undue reliance on
these statements. Such forward-looking statements reflect the
current views of the Company regarding future events, and involve
known and unknown risks, uncertainties and other factors that may
cause actual results to be materially different from any future
results, performance or achievements expressed or implied by such
statements. There can be no guarantee that rituximab will be
submitted or approved for sale in any market, or at any particular
time. Neither can there be any guarantee that Sandoz will succeed
in developing and bringing to market any additional biosimilar
productions. Nor can there be any guarantee that rituximab or any
other biosimilar products will achieve any particular levels of
revenue in the future. In particular, management's expectations
regarding such products could be affected by, among other things,
unexpected development difficulties; unexpected manufacturing
difficulties; unexpected clinical trial results, including
unexpected new clinical data and unexpected additional analysis of
existing clinical data; unexpected regulatory actions or delays or
government regulation generally; competition in general;
government, industry and general public pricing pressures;
unexpected patent litigation outcomes; the impact that the
foregoing factors could have on the values attributed to the
Group's assets and liabilities as recorded in the Group's
consolidated balance sheet, and other risks and factors referred to
in Novartis AG's current Form 20-F on file with the US Securities
and Exchange Commission. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those
anticipated, believed, estimated or expected. Novartis is providing
the information in this press release as of this date and does not
undertake any obligation to update any forward-looking statements
contained in this press release as a result of new information,
future events or otherwise.

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About Sandoz Sandoz, a Division of the Novartis group, is a
global leader in the field of generic pharmaceuticals, offering a
wide array of high-quality, affordable products that are no longer
protected by patents. Sandoz has a portfolio of approximately 1000
compounds and sells its products in more than 130 countries. Key
product groups include antibiotics, treatments for central nervous
system disorders, gastrointestinal medicines, cardiovascular
treatments and hormone therapies. Sandoz develops, produces and
markets these medicines along with pharmaceutical and
biotechnological active substances and anti-infectives. In addition
to strong organic growth in recent years, Sandoz has made a series
of acquisitions including Lek (Slovenia), Sabex (Canada), Hexal
(Germany), Eon Labs (US), and EBEWE Pharma (Austria). In 2009,
Sandoz employed approximately 23,000 people worldwide and posted
sales of USD 7.5 billion.